{"id":2060,"date":"2017-09-04T07:49:42","date_gmt":"2017-09-04T07:49:42","guid":{"rendered":"http:\/\/www.newsfin.co.uk\/news\/?p=2060"},"modified":"2017-09-04T07:49:42","modified_gmt":"2017-09-04T07:49:42","slug":"whole-of-life-insurance","status":"publish","type":"post","link":"https:\/\/teessidefinancial.com\/news\/whole-of-life-insurance\/","title":{"rendered":"Whole-of-life insurance"},"content":{"rendered":"

A guaranteed tax-free payment whenever you die<\/h3>\n

When you start investing, or even if you are a sophisticated investor, one of the most important tools available is diversification. Whether the market is bullish or bearish, maintaining a diversified portfolio is essential to any long-term investment strategy.<\/h5>\n

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A whole-of-life insurance policy is designed to give you a specified amount of cover for the whole of your life, and it pays out when you die \u2013 whenever that is. Because it\u2019s guaranteed that you\u2019ll die at some point (and therefore that the policy will have to pay out), these policies are more expensive than term insurance policies, which only pay out if you die within a certain time frame.<\/p>\n

Paying Inheritance Tax<\/h2>\n

Whole-of-life insurance policies can be a useful way to cover a\u00a0future Inheritance Tax bill. If you think your estate will have to pay Inheritance Tax when you die, you could set up a whole-of-life insurance policy to cover the tax due, meaning that more is passed to your beneficiaries. To ensure the proceeds of the life insurance policy are not included in your estate, it is vital that the policy be written in an appropriate trust. This is a very complicated area of estate planning, and you should obtain professional advice.<\/p>\n

A whole-of-life insurance policy has a double benefit: not only can the proceeds of the policy be written under trust so that they are outside your estate for Inheritance tax purposes, but the premium paid for the policy will reduce the value of your estate while you\u2019re alive, further reducing your estate\u2019s future Inheritance Tax bill.<\/p>\n

Different types of policy<\/h2>\n

There are different types of whole-of-life insurance policy \u2013 some offer a set payout from the outset while others are linked to investments, and the payout will depend on performance. Investment-linked policies are either unit-linked policies linked to funds, or with-profits policies which offer bonuses.<\/p>\n

Some whole-of-life policies require that premiums are paid all the way up to your death. Others become paid up at a certain age and waive premiums from that point onwards.<\/p>\n

Whole-of-life policies (but not all)\u00a0have an investment element and therefore a surrender value. If, however, you cancel the policy and cash it in, you will lose your cover. Where there is an investment element, your premiums are usually reviewed after ten years and then every five years.<\/p>\n

Whole-of-life policies are also available without an investment element and with guaranteed or investment-linked premiums from some providers.<\/p>\n

Reviews<\/h2>\n

The level of protection selected will normally be guaranteed for the first ten years, at which point it will be reviewed to see how much protection can be provided in the future. If the review shows that the same level of protection can be carried on, it will be guaranteed to the next review date.<\/p>\n

If the review reveals that the same level of protection can\u2019t continue, you\u2019ll have two choices:<\/strong><\/p>\n